# Fibonacci Calculator - A Powerful Technical Tool

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The Fibonacci calculator will show you the retracement and extension levels according to the popular Fibonacci theory used in forex trading.

 Uptrend *) The highest price point according to your observations (example: 1.35000) *) The lowest price point according to your observations (example: 1.31000)
 Retracements 0% (b) 23.6% 38.2% 50% 61.8% 76.4% 100% (a) 138.2%
 Extensions 261.8% 200% 161.8% 138.2% 100% 61.8% 50% 38.2% 23.6%

 Downtrend *) The highest price point according to your observations (example: 1.35000) *) The lowest price point according to your observations (example: 1.31000)
 Retracements 138.2% 100% (a) 76.4% 61.8% 50% 38.2% 23.6% 0% (b)
 Extensions 23.6% 38.2% 50% 61.8% 100% 138.2% 161.8% 200% 261.8%

It is commonly observed that prices tend to correct at either the 50% or 61.8% Fibonacci retracement level before resuming the prevailing trend. As such, traders could use the levels as the main pullback references during a strong trend. In financial trading, we don't use Fibonacci numbers as it is but based on the distance between the numbers in the series. For example, dividing 89 in the Fibonacci sequence by the following 144 will result in 0.6180 (61.8%). Furthermore, if the number 89 is divided by the second number after it in the Fibonacci sequence, it will come out as 0.3819 (38.2%), and so on.

Based on these rules, we acquire Fibonacci Retracement levels and Fibonacci Extension levels which can surprisingly explain price movements when applied to the price chart. Therefore, Fibonacci is also used in forex trading as a technical analysis tool. 1. Identify where prices move. For example in the picture below, it seems that prices are going down (bearish). In this situation, traders will look for opportunities to sell when prices temporarily retrace higher.
2. Mark the horizontal lines where Fibonacci Retracement 23.6% (0.236), 38.2% (0.382), and 61.8% (0.618) are located. These lines are used to identify levels where prices are more likely to reverse.
3. Observe close prices on the candle that represents price movements near the aforementioned Retracement levels. When prices have risen up to Fibonacci levels of 0.236, 0.382, or 0.618, take note of where the next candle closes.